Robinhood, which was valued at around $11.7 billion last year, is reportedly planning an Initial Public Offering (IPO) as early as this month.
The move comes in the wake of the recent controversy surrounding its financial footing after stocks including GameStop underwent radical ups and downs.
The popular online investing app was in a cash crunch as industry clearinghouses demanded Robinhood put up more funds to make sure they could payout trades.
They made the pivotal decision during GameStop’s meteoric rise in activity to restrict users from buying its stock in order to manage the amount of money being paid out and to get volatility back under control.
Since that time, Robinhood has lifted the trading ban. The new IPO has been planned for more than a year and is said to be unrelated to the GameStop incident. The IPO will only be offered to current Robinhood customers.
An IPO is an Initial Public Offering of shares on a public stock exchange. This is a time when the company and its shareholders can sell their positions to investors in the public markets.
For a company, an IPO is a way to generate cash from new investors and a way for early investors to unload their position.
For investors, IPOs can be an opportunity to purchase ownership in a popular business. This move is significant since retail consumers usually don’t get the opportunity to buy new listings at the offering price.
Robinhood Financial is a broker platform designed to open doors to the financial markets by offering commission-free trades on an easy-to-use mobile app. It does not require any account minimums. They don’t charge any fees when you open an account, transfer funds to it, or for maintaining your account.
When you sign up for a new account, you’ll automatically start with a Robinhood Instant account. You will have access to instant deposits and extended-hours trading. You also won’t have to wait 3 days for your funds to process when you sell stocks or make a deposit (up to $1,000).
You can transfer up to $50,000 per business day into your account.
Robinhood Instant is free. There are no monthly or recurring fees, no trading commissions, no interest charges, and no account minimums.
Robinhood Gold is a premium feature that gives you access to higher-level research, more trades allowed daily, and margin accounts for a small monthly fee. For $5 a month, you get add the Robinhood Gold premium features, and your first $1,000 of margin is included. You will be charged $5 every 30 days at the beginning of your billing cycle.
The platform only permits three daily trades in a five-day trading period. However, they allow unlimited trades if you have $25,000 of equity. Robinhood will also permit several trades if you have gold or margin account.
Robinhood is a popular online investing, commission-free trading app that’s especially attractive to millennials.
The recent controversy has died down, and the company is in solid financial standing.
The IPO was planned months ago, and carries benefits for both the company and its investors. However, it’s easy to jump on an IPO bandwagon and overextend yourself, so take a long hard look at your financial situation and your longer-term goals.